Which of the Following Statements Is True with Regards to the Cash

question 2

Multiple Choice

Which of the following statements is true with regards to the cash flows used in the net present value method?

• A) The net cash inflows for each period may have a positive or negative value.
• B) The final net cash inflow includes any salvage value that may be gained by selling the investment.
• C) All expected cash flows throughout the investment period are considered in the NPV calculation.
• D) All the statements are true.

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Definitions:

Organizational Members

Individuals who are part of a company or institution and contribute to its goals and culture.

Maximization

The choice of the decision alternative with the greatest expected value.

Satisficing

Establishing an adequate level of acceptability for a solution to a problem and then screening solutions until one that exceeds this level is found.

Bounded Rationality

A concept suggesting that when individuals make decisions, their rationality is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make a decision.